Dave formed Shull Company and transferred land ($100,000 fair market value; $40,000 adjusted basis) and equipment ($50,000 fair market value; $10,000 adjusted basis) in exchange for 100 shares of stock. Shull Company assumes the $45,000 mortgage on the land as part of the transfer. Dave's tax consequences are:

Gain/income recognized $50,000 Stock basis: $60,000

Gain/income recognized $5,000 Stock basis: $0

Gain/income recognized $100,000 Stock basis: $100,000

Gain/income recognized $0 Stock basis: $50,000